logo logo

What is the difference between an Agreement for sale and a Sale Deed? Is it necessary to enter into a Sale Agreement with a seller ?

- by Suresh, Bangalore

Though an Agreement for sale and a Deed of Sale relate to purchase of property, there are difference between them. Sale of an immovable property is usually preceded by an Agreement for Sale. The subsequent Deed of Sale is based on the Agreement for Sale. Agreement for Sale is a very important document. It records the understanding reached between the parties, which is binding on both. After making preliminary enquiries, the parties with or without their advocates sit and discuss the price and other terms and conditions and thereafter these are incorporated in the Agreement for sale. The main ingredients of  Agreement for Sale are the price consideration, accurate description of the property to be purchased and mode of payment, cost of transfer, specific enforcement and penalty clauses in case of default. An Agreement for Sale protects the interest of both parties. It may be written or oral. The seller cannot alienate the property through an Agreement for sale.

A Deed of Sale is a written document executed between the buyer and the seller. It narrates in brief how the seller got the property, at what price he is selling the property, the sale consideration amount received, his assurances to the Purchaser that the property is unencumbered and in case of any claim the purchaser will be indemnified. Both seller and purchaser shall execute the sale deed. A sale Deed must be registered. After registration and receipt of the balance consideration amount in the presence of witnesses, the property stands transferred to the purchaser.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.


Q:- I am lucky that I got an allotment of site in Anjanapura Layout. The BDA has executed the sale deed in my favour on payment of full amount; the sale deed is in my possession. I have possession certificate and Katha issued by BDA in my favour. I am paying the property tax regularly; I have not fenced the site, as BDA has installed board indicating the site numbers. I was away from the country for the last six months and returned recently. During my recent visit to site, I was surprised, as I could not locate my site. It has been encroached by my neighbour who has constructed a compound. The board indicating the site numbers is removed. Please advise me how to get my site as BDA expressed helplessness.

Q:- My friend had purchased a house in Gadag.  It has only ground floor. He has permitted me to construct another floor (1st floor) and to use it for my residence or let out.  He assures me that I would be the Owner of that floor and is willing to execute any documents in this regard.  Please suggest the proper documents to be obtained.

Q:- I have purchased a site from my friend. My friend got the site by allotment of BDA and has paid the full value to the BDA, which has executed a conditional sale deed.  The sale deed has put a condition that the transferee should not sell the site for a period of 10 years from 1986 that is up to 1996, whereas I purchased it in 1994.  I have paid full price and the sale deed is registered in my name.  Please advise whether the condition put by BDA would trouble me.

Q:- My cousin is a minor and owns certain immovable properties in Mysore. He would be completing 18 years of age on 12th March 2005.  It is learnt that his natural guardian is negotiating to lease out his properties for 15 years. Please advise me whether he can lease the property for 15 years.

Q:- I have constructed a residential complex which I would like to let out. My son suggests having leave and license agreement, instead of lease or rental agreement.  Please inform what is the difference between rental agreement with leave & license agreement?